Space Shortage Looming?

Office Vacancy rates around Australia are falling — albeit faster in some capital cities, than others.

The chart below shows you where things currently stand.

Given the respective supply and pre-commitment levels, Vacancy rates for Melbourne and Adelaide should quickly tightened even further. And this will put considerable pressure upon rentals … both for CBD and suburban Offices.

Financiers have been forcing a higher level of pre-commitment. And this has curbed the amount of speculative development, compared with previous cycles.

Therefore, not until around 2014 will rent levels be high enough to encourage speculative development once again.

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